This report presents the results of our audit of Ginnie Mae’s fiscal years 2018 and 2017 financial statements, including our report on Ginnie Mae’s internal control and test of compliance with selected provisions of laws and regulations applicable to Ginnie Mae. In fiscal year 2018, for the fifth consecutive year, we were unable to obtain sufficient, appropriate evidence to express an opinion on the fairness of the $3 billion (net of allowance) in nonpooled loan assets from Ginnie Mae’s defaulted issuers’ portfolio as of September 30, 2018. Ginnie Mae also continued to improperly account for Federal Housing Administration reimbursable costs as an expense instead of capitalizing them, also for the fifth consecutive year. The combination of these unresolved issues for a number of years was both material and pervasive because it impacted multiple financial statement line items across all of Ginnie Mae’s basic financial statements. As a result of the scope limitation in our audit work and the effects of material weaknesses in internal control, we have not been able to obtain sufficient, appropriate evidence to provide a basis for an audit opinion on Ginnie Mae’s fiscal years 2018 and 2017 financial statements. This report contains the updated status of prior-year audit findings,comprised of four material weaknesses, one significant deficiency, and one reportable noncompliance with selected provisions of laws and regulations.

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